If you are planning your estate as someone with a high amount of assets, you will likely be concerned about estate taxes. While estate taxes at death are faced by less than 1% of the American population, these individuals must do what they can to minimize the taxes that their estate will be subject to.
There are many ways to use estate planning strategies creatively so that your estate will not be subject to estate taxes. The following are some common strategies that estate planners implement when doing this.
Make donations to charities
When a person sets up a charitable trust, the assets held within will be exempt from taxes. Deciding to create a charitable trust has many benefits. Not only will you be able to avoid estate taxes, but you will also be able to take pleasure in knowing that a portion of your wealth will be used to help others for years to come.
Set up an irrevocable life insurance trust
Life insurance can be taxable after the insurance holder passes away. However, if you set up an irrevocable life insurance trust, you are essentially transferring the ownership over to another person, thereby avoiding its taxability.
Make gifts during your lifetime
Giving gifts can be a great pleasure. It is also possible to do without incurring taxes up to a certain amount. Therefore, you may want to consider giving gifts to your loved ones or charities during your lifetime.
If you want to minimize the taxes that your estate will be subject to at the end of your lifetime, you should make sure to incorporate a variety of strategies into your estate plan.